German Bund futures pushed higher on Friday as Greece’s political deadlock and JPMorgan’s revelation of a huge trading loss hit equity markets, spurring demand for low-risk investments.
Peripheral euro zone government bonds were set to remain under pressure given the negative sentiment in riskier assets as Greece makes a last-gasp attempt to cobble together a government and avert a repeat election while European Union leaders warn that Greece’s euro membership is at stake.
“There’s a lot of noise about politics but this potential coalition sounds very weak if they can get it together, which I’m not convinced they can,» a trader said.
“I don’t see a lot of positive risk news this morning. Dips are there to be bought in Bunds every time,» he added.
The June Bund future rose 28 ticks to 142.89, with the same trader saying it looked set to retest the record high of 143.03 hit on Wednesday.
European equities were set to fall, tracking losses in Asian and U.S. markets after JPMorgan, the biggest US bank by assets, shocked investors with a trading loss of at least $2 billion from a failed hedging strategy. [Reuters]